15 November 2006

Severstal Board of Directors resolutions: recommended dividend of us$0.074 per share and GDR for the third quarter of 2006; pricing of newly-issued shares

NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN

This press release is not a prospectus but an advertisement. Investors should not subscribe for any transferable securities referred to in this announcement except on the basis of information in the prospectus published by OAO Severstal in connection with the admission of GDRs representing OAO Severstal’s shares to the Official List of the Financial Services Authority.

OAO Severstal (the “Company”) today announces that on 14 November 2006 its Board of Directors recommended a dividend of 2 rubles, an equivalent of US$ 0.074 per share and per global depositary receipt (“GDR”) for the third quarter of 2006 with the record date of 16 November 2006.  Each GDR represents one share in the Company.  The GDRs are admitted to trading on the London Stock Exchange.

The dividend, which is subject to shareholder approval, will be voted on at the Company's EGM scheduled for 25 December 2006. If approved, the dividend will result in an aggregate cash payment to holders of ordinary shares and, through and subject to the terms of the Company’s depositary facility, holders of GDRs of approximately US$ 70 million for the third quarter of 2006, which should result in a total dividend payment of approximately US$ 195 million for 9 months of 2006, including approximately US$ 125 million paid in the first half of this year.

The proposed dividend is in line with OAO Severstal’s dividend policy announced in 2003, under which it aims to pay as dividends a minimum of 25% of net profits received by the end of the reporting period, calculated according to IFRS. The company follows this policy according to the announced principles and Russian corporate law regulations.

Following the expiration of shareholder pre-emptive rights, the Board of Directors also set the price of the Company's 85 million newly-issued ordinary shares at 332.74 rubles per share for the open subscription, an equivalent of US$ 12.50 per share, and at 322.81 rubles per share for shareholders exercising pre-emption rights, an equivalent of US$ 12.10 per share.  The price payable by shareholders exercising pre-emption rights is equal to the price payable in the open subscription less the pro rata per share amount of certain commissions, fees and other expenses paid or incurred by shareholders in connection with the Company’s recent Global Offering of ordinary shares and GDRs.

According to Articles 40 and 41 of the Federal Law on Joint Stock Companies, shareholders were granted pre-emptive rights to purchase pro-rata to their existing shareholding in the Company as at 14 September 2006 – the date of the meeting of the Board of Directors of the Company where the decision to issue additional shares was approved.

Frontdeal and other entities under the controlling shareholder’s control exercised in full their pre-emptive rights to subscribe to newly issued shares.

Enquiries:

Severstal
Dmitry Druzhinin, Investor Relations
Olga Antonova, Public Relations
+7 495 540 7766

Citigate Dewe Rogerson
Andrew Hey
Tom Baldock
Marina Zakharova
+44 20 7638 9571

NOTES TO EDITORS

Severstal’s business:

Severstal’s vertical integration, focus on high value-added products, substantial modernisation of operations and recent geographic expansion through attractive acquisitions have enabled it to leverage cost synergies and generate stronger cash flows and earnings.  Severstal seeks to actively enhance its product portfolio with new products to meet customer demand for high quality flat products in Russia and the United States, particularly in the automotive industry, niche products in Russia, including large diameter pipes and wire drawn products, and specialty and high value products in Europe, including special bars and wire rods produced by Lucchini.

This press release does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. The offer and the distribution of this press release and other information in connection with the listing and offer in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This communication is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). The offered securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this communication or any of its contents. Stabilisation/FSA

Any offer of securities to the public that may be deemed to be made pursuant to this communication in any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the “Prospectus Directive”) is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive.

This press release is not an offer for sale of any securities of Severstal in the United States including its territories and dependencies, any state of the United States and the District of Columbia. No securities of Severstal have been, or will be, registered under the US Securities Act 1933, as amended, and securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Information contained in this press release does not constitute an offer or an advertisement of any securities in the Russian Federation. The GDRs have not been and will not be registered in the Russian Federation and are not intended for “placement” or “public circulation” in the Russian Federation.